Murphy’s Law, written by Barbara Murphy, appears monthly in The Golden Times. The column represents the opinion of the author and is not necessarily the opinion of the publisher.
Subsidies Will Prevent Chinese Domination
Of World's ‘Green’ Industry
Solyndra.
Never heard of it? You will — again and again and again. A solar deal gone bad, Solyndra is an embarrassment to President Obama, a gift to the GOP, and a body blow to those who view government subsidies as necessary for economic recovery and the success of “green energy” development.
Solyndra is a California solar energy company that in August filed for Chapter 11 bankruptcy protection (laying off 1,100 employees in the bargain) even though the company had received $535 million in a federal loan guarantee. Solyndra was the first company to get such a guarantee under a federal stimulus program to encourage the development of green energy.
Questions are being asked why Solyndra got the loan guarantee in the first place. The Associated Press reported that Solyndra was losing millions of dollars for before it got the loan and that government records show the Obama Administration later restructured the loan in such a way “that it put private investors — including a fundraiser for President Obama — ahead of taxpayers in line for repayment in case of a default.” Congress and the Justice Department have launched investigations.
Reportedly, Solyndra’s big mistake was investing heavily in a new type of solar cell ingredient just as the price of silicon — the main ingredient in competitors’ solar cells — was dropping. But many have made the convincing argument that Solyndra and other U.S. “green” companies — including especially solar companies — cannot compete with China, which is subsidizing its green energy enterprises with billions of dollars. China’s goal is domination of the world wide “green” industry.
No matter the fate of Solyndra, this country cannot afford to let China get away with that. To do so would mean that the millions of jobs which green industry is expected to produce will be Chinese jobs — not American jobs.
The extent of the problems was made evident locally just a few weeks ago when a Greek company, Heliosphere, dropped plans to build a $500 million solar cell manufacturing plant at Philadelphia’s Navy Yard that would have employed 400 people. The company could not raise the needed capital. This happened while two other solar companies were joining Solyndra in seeking bankruptcy protection.
Philadelphia Inquirer writer Andrew Maybath, who reported the collapse of the Heliosphere project, said the world solar market is in upheaval because of oversupply created by huge increases in Chinese manufacturing capacity. Solar cell prices reportedly have dropped 42 percent.
Mr. Maybath wrote that Jonathan Silver, executive director of the U.S. Energy Department’s loan program, recently testified to Congress that “Chinese companies have flooded the market with inexpensive [solar] panels.”
However, Mr. Silver defended the Obama Administration’s solar investments, which he said last year totaled only 5% of the $30 billion the Chinese government spent on developing solar power. Mr. Silver continued: “Why is China making this investment? Because the race for solar-manufacturing jobs is a race worth winning. Over the next few decades this will become a global market worth trillions of dollars.”
Martin Jacques, author of the book “When China Rules The World,” wrote in The New York Times on Sept. 25: “If the Chinese economy, as projected by Goldman Sachs, overtakes the American economy by 2027 and is almost double the size by 2050... American must concentrate on economic regeneration, including huge expenditures on modernizing its infrastructure and education system.”
Unhappily, Mr. Jacques also wrote that America must come to terms with the fact that China’s rise and America’s decline are not simply a result of a failure of policy but rather is one of those great historical shifts that governments can do little to prevent.
Maybe Mr. Jacques can come to terms with China’s economic domination of the world, but I can’t. I think our government must fight to protect the growth and success of American industry — green and ever other kind.
Government subsidy cannot be treated as a dirty word in this country no matter what the right-wing politicos say. Too many jobs, too many lives are at stake. We can’t let China out-spend us and take over every industry in the world. No matter what it costs in taxes — and it will cost — we must subsidize industries that, with a little help, will have a profitable future enabling them to hire lots of Americans. We can’t let the failure of a few solar companies cause us to crumple and accept economic failure and growing poverty as our lot.
We have to rise to the challenge posed by the China Syndrome.
*
Barbara Murphy, 78, writes about controversial issues each month.
Of World's ‘Green’ Industry
Solyndra.
Never heard of it? You will — again and again and again. A solar deal gone bad, Solyndra is an embarrassment to President Obama, a gift to the GOP, and a body blow to those who view government subsidies as necessary for economic recovery and the success of “green energy” development.
Solyndra is a California solar energy company that in August filed for Chapter 11 bankruptcy protection (laying off 1,100 employees in the bargain) even though the company had received $535 million in a federal loan guarantee. Solyndra was the first company to get such a guarantee under a federal stimulus program to encourage the development of green energy.
Questions are being asked why Solyndra got the loan guarantee in the first place. The Associated Press reported that Solyndra was losing millions of dollars for before it got the loan and that government records show the Obama Administration later restructured the loan in such a way “that it put private investors — including a fundraiser for President Obama — ahead of taxpayers in line for repayment in case of a default.” Congress and the Justice Department have launched investigations.
Reportedly, Solyndra’s big mistake was investing heavily in a new type of solar cell ingredient just as the price of silicon — the main ingredient in competitors’ solar cells — was dropping. But many have made the convincing argument that Solyndra and other U.S. “green” companies — including especially solar companies — cannot compete with China, which is subsidizing its green energy enterprises with billions of dollars. China’s goal is domination of the world wide “green” industry.
No matter the fate of Solyndra, this country cannot afford to let China get away with that. To do so would mean that the millions of jobs which green industry is expected to produce will be Chinese jobs — not American jobs.
The extent of the problems was made evident locally just a few weeks ago when a Greek company, Heliosphere, dropped plans to build a $500 million solar cell manufacturing plant at Philadelphia’s Navy Yard that would have employed 400 people. The company could not raise the needed capital. This happened while two other solar companies were joining Solyndra in seeking bankruptcy protection.
Philadelphia Inquirer writer Andrew Maybath, who reported the collapse of the Heliosphere project, said the world solar market is in upheaval because of oversupply created by huge increases in Chinese manufacturing capacity. Solar cell prices reportedly have dropped 42 percent.
Mr. Maybath wrote that Jonathan Silver, executive director of the U.S. Energy Department’s loan program, recently testified to Congress that “Chinese companies have flooded the market with inexpensive [solar] panels.”
However, Mr. Silver defended the Obama Administration’s solar investments, which he said last year totaled only 5% of the $30 billion the Chinese government spent on developing solar power. Mr. Silver continued: “Why is China making this investment? Because the race for solar-manufacturing jobs is a race worth winning. Over the next few decades this will become a global market worth trillions of dollars.”
Martin Jacques, author of the book “When China Rules The World,” wrote in The New York Times on Sept. 25: “If the Chinese economy, as projected by Goldman Sachs, overtakes the American economy by 2027 and is almost double the size by 2050... American must concentrate on economic regeneration, including huge expenditures on modernizing its infrastructure and education system.”
Unhappily, Mr. Jacques also wrote that America must come to terms with the fact that China’s rise and America’s decline are not simply a result of a failure of policy but rather is one of those great historical shifts that governments can do little to prevent.
Maybe Mr. Jacques can come to terms with China’s economic domination of the world, but I can’t. I think our government must fight to protect the growth and success of American industry — green and ever other kind.
Government subsidy cannot be treated as a dirty word in this country no matter what the right-wing politicos say. Too many jobs, too many lives are at stake. We can’t let China out-spend us and take over every industry in the world. No matter what it costs in taxes — and it will cost — we must subsidize industries that, with a little help, will have a profitable future enabling them to hire lots of Americans. We can’t let the failure of a few solar companies cause us to crumple and accept economic failure and growing poverty as our lot.
We have to rise to the challenge posed by the China Syndrome.
*
Barbara Murphy, 78, writes about controversial issues each month.
